24 ) Use the information for the question(s) below.

The owner of a hair salon spends $1,000,000 to renovate its premises, estimating that this will increase her cash flow by$220,000 per year. She constructs the above graph, which shows the net present value (NPV) as a function of the discount rate. At what discount rate does her decision to renovate become untenable?

A.3.3%

B.3.0%

C.4.0%

D.5.0%

E.4.8%

45) Longbow Lumber is purchasing a new horizontal resaw at a cost of $375,000. There is an additional $10,000 delivery and installation cost. The machine has a capital cost allowance (CCA) rate of 20%. What is the incremental undepreciated capital cost (UCC) for year 2?

A.$385,000

B.$375,000

C.$346,500

D.$192,500

E.$337,500

46 ) A firm reports that in a certain year it had revenues of $4.5 million, costs of $1.2 million, a capital cost allowance (CCA) deduction of $2.8 million, capital expenditures of $2.3 million, and net working capital decreased by $1.5 million. If the firm's marginal corporate tax rate is 30%, what is the firm's free cash flow for that year?

A. $1.75 million

B. $2.35 million

C. $2.15 million

D. $5.30 million

E. $0.65million

47) You have invested $10,000 in RBC stock and $21,000 in TD stock. If you expect the return on RBC to be 5% in the next year, and the return on TD to be 6.5%, what is the expected return for your portfolio?

A.5.75%

B.5.5%

C.6.5%

D.6%

E.5%

150000 100000 50000 0 - NPV 2 3 4 X 5 01 1 T T 7 6 8 9 10 -50000 -100000 -150000 -200000 Discount Rate